Kentucky Restaurant Bans Tipping – And It’s Genius

Packhouse Meats in Newport, Kentucky, has banned tipping. In addition to signs posted throughout the restaurant, there isn’t a tip line on your credit card receipt, and it’s actually working out well.

The restaurant has come under scrutiny as being unfair to the wait staff, but the servers don’t seem to be complaining about their pay. They’re given a $10 per hour base wage or 20% of their food sales during their shift, whichever is higher. What does that mean for pay? The staff has the opportunity to make bank on those busy nights.

The policy is working well for both the restaurant and the servers because the servers want to upsell, meaning more money for the restaurant. Customers are more likely to be happy as well, since servers aren’t stressed about fretting over a table that may not tip them at the end of their meal. Servers are more relaxed, more attentive (because they want to sell more), the restaurant makes money, and everyone goes home happy.

It’s pretty awesome.

Having been a server myself, I understand the frustration that goes along with busting your hump to satisfy a table, only to be left with $3 on a $100 check. It leaves servers feeling grumpy and cheated, and as much as they may try, that frustration will sometimes show to other tables. Taking a tip out of the equation while still paying the servers a decent (sometimes VERY decent) wage means everyone comes out ahead.